Empresas CMPC (CMPC) Q3 2024 earnings summary

Executive summary

• 3Q 2024 sales reached $1,984 million, up 5% quarter-over-quarter but down 1% year-over-year, with EBITDA at $433 million (21.8% margin) and net income at $147 million, driven by strong Pulp and Biopackaging performance, partially offset by Softys.

• EBITDA increased 15% quarter-over-quarter and 64% year-over-year, with net income up 18% sequentially and 74% year-over-year.

• Net debt to EBITDA ratio improved to 3.3x from 3.75x in the previous quarter, reflecting stronger cash generation.

• Pulp business led with $317 million EBITDA (37% margin), while Softys and Biopackaging contributed $109 million and $26 million, respectively.

• Sales growth was mainly due to higher volumes in Pulp and Biopackaging, offset by lower Softys sales.

Financial highlights

• Operating costs were $1.2 billion, representing 62% of revenues, up 3% quarter-over-quarter but down 12% year-over-year.

• Other operating expenses totaled $320 million, up 2% quarter-over-quarter and down 3% year-over-year.

• Free cash flow was $61 million inflow in 3Q24, compared to a $22 million outflow in 2Q24 and $87 million inflow in 3Q23.

• Capex was $194 million in 3Q24, up from $146 million in 2Q24 but down from $243 million in 3Q23.

• Total debt stood at $5,528 million, with cash and equivalents at $776 million at quarter-end.

Outlook and guidance

• Management expects further improvement in net debt to EBITDA ratio by year-end and into coming quarters, with ongoing efficiency and sustainability initiatives.

• Pulp market expected to remain stable through year-end, with potential for price increases in 2025, especially if Chinese demand recovers.

• Softys' acquisition of Ontex Brazil for $120 million is expected to close within six months, supporting expansion in personal care.

• Cost improvement programs and operational efficiencies are expected to continue reducing costs and supporting margins.